OCTOBER TERM, 1991
certiorari to the supreme court of michigan
No. 90-1390. Argued December 10, 1991—Decided March 9, 1992
In 1980, the Michigan Legislature raised maximum weekly workers' compensation benefits and provided an annual supplemental adjustment to workers injured before 1980. The following year it enacted a statute allowing employers to decrease workers' compensation benefits to those disabled employees eligible to receive wage-loss compensation from other employer-funded sources. Some employers, including petitioners, General Motors Corporation and Ford Motor Company, took the position that the 1981 law's "benefit coordination" provision allowed them to reduce workers' compensation benefits to workers injured before the statute's effective date, who were receiving benefits from other sources. The State Supreme Court ultimately accepted this interpretation. Chambers v. General Motors Corp., 422 Mich. 636, 375 N. W. 2d 715. In 1987, the legislature repudiated Chambers and required employers who had coordinated benefits for previously disabled workers under the 1981 law to refund the benefits withheld. The State Supreme Court upheld the 1987 law, rejecting petitioners' arguments that the reimbursement provision was unfairly retroactive and violated the Contract Clause and the Due Process Clause of the Federal Constitution.
Held: 1. The 1987 statute did not substantially impair the obligations of petitioners' contracts with their employees in violation of the Contract Clause, because there was no contractual agreement regarding the specific terms allegedly at issue. The contracts were entered into after collective bargaining between the parties before the 1981 law was enacted and make no express mention of workers' compensation benefits. Nor was the workers' compensation law an implied contract term whereby employers promised to pay the amount required by law for each payment period, an obligation that was completed by making payments for any disability period. There was no occasion for the parties to consider in bargaining taking place before the 1981 law's effective date the question whether an unanticipated reduction in benefits could later be restored after the "benefit period" had closed. Petitioners err in arguing that such a term is "incorporated" by law into the employment contracts, regardless of the parties' assent. Michigan law does not explicitly imply a contractual term allowing an employer to depend on the closure of past disability compensation periods; and such a right
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